Disappearing DJs bid

IT COULD be one of the most costly April Fool's jokes ever pulled on the Australian investment community, even if it is July, with a $1.65 billion takeover bid for the country's second-biggest department store, David Jones, evaporating yesterday and causing its share price to dive.

The farcical nature of the day's corporate activity included lingerie models, noodle shops, vanishing websites, a roller-coaster share price and the sometimes shadowy world of private equity investors.

The surprise David Jones bid, made public on Friday, created more than $175 million in value in an instant as investors piled into the stock hoping a takeover war would erupt. But the offer was pulled just as quickly yesterday afternoon, stripping $140 million from DJs' market capitalisation as the shares gave up most of their gains.
Advertisement: Story continues below

In the wake of the disappearing takeover offer - which until Sunday night was being spruiked by its mysterious backer to local media via a PR firm - there may be renewed pressure on the Australian Securities Exchange's rigid regulations on continuous disclosure and directors' obligations to inform investors about every letter that comes across the boardroom table.

Last night, David Jones was forced to defend its disclosure of the offer to investors in a letter responding to a series of queries from the stock exchange.